EVCM 10-K & 10-Q changes, risk factors and insider trading

If we fail to address the risks and difficulties that we face, including those associated with the challenges listed above and those described elsewhere in this “Risk Factors” section, our business, financial condition and results of operations could be adversely affected. Further, because we have limited historical financial data and our business continues to evolve and expand within the industries in which we operate, any predictions about our future revenue and expenses may not be as accurate as they would be if we had a longer operating history, operated a more predictable business or operated in a single or unregulated industry. We have encountered in the past, and will encounter in the future, risks and uncertainties frequently experienced by growing companies with limited operating histories and evolving businesses that operate in regulated and competitive industries. If our assumptions regarding I-12 these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results of operations could differ materially from our expectations and our business, financial condition and results of operations would be adversely affected.

Our recenthistorical growth rates may not be sustainable or indicative of future growth.

We have incurred significant operating losses since our inception. Our net lossincome from continuing operations was $41.1$18.2 million and $45.6a net loss from continuing operations of $15.2 million for the years ended December 31, 20242025 and 2023,2024, respectively. Our operating expenses may increase substantially in the foreseeable future as we continue to invest to grow our business and build relationships I-12 with or clients and partners, develop new solutions and comply with requirements of being a public company. These efforts may prove to be more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. If we are unable to effectively manage the risks and difficulties of investing to grow our business, building relationships and developing new solutions as we encounter them, our business, financial condition and results of operations may suffer.

Historically, we have experienced fluctuations in period to periodperiod-to-period operating results, with stronger results and higher revenue in the second and third quarters of the year, and our quarterly and annual operating results may continue to fluctuate significantly due to a variety of factors, many of which are outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful. Our past results may not be a predictor of our future performance.

Accordingly, we may need to engage in equity or debt financings or collaborative arrangements to secure additional funds. Additional financing may not be available on terms favorable to us, or at all. If we raise additional funds through further issuances of equity or convertible securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our ordinary shares. Any debt financing secured by us in the future could involve additional restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. In addition, during times of economic instability, it has been difficult for many companies to obtain financing in the public markets or to obtain debt financing, and we may not be able to obtain additional financing on commercially reasonable terms, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, it could have a material adverse effect on our business, financial condition and results of operations. Further, thewe Company maintainsmaintain the majority of itsour cash and cash equivalents in accounts with major U.S. and multi-national financial institutions, and our deposits at certain of these institutions exceed insured limits. Market conditions can impact the viability of these institutions. In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we will be able to access uninsured funds in a timely manner or at all.

Our future growth and profitability depend, in part, upon our continued expansion within the vertical markets in which we currently operate, the emergence of other vertical markets for our solutions and our ability to penetrate new vertical markets. As part of our strategy to expand into new vertical markets, we look for acquisition opportunities and partnerships that will allow us to increase our market penetration, technological capabilities, offering of solutions and distribution capabilities. We may not be able to successfully I-14 identify suitable acquisition or partnership candidates in the future, and if we do, they may not provide us with the benefits we anticipated.

The market for our solutions and services is highly competitive and subject to rapidly changing technology, shifting customer needs and frequent introductions of new products and services. As our platform is utilized across industries, we compete in a variety of highly fragmented markets and face competition from a variety of sources, including manual processes, basic PC tools, homegrown solutions, as well as from vertically-specialized and horizontal competitors. Vertically-specialized competitors include mobile sales applications and field service management platforms in Home Services, EHR / EMR and practice management platforms in Health Services and scheduling and management in Wellness Services. Horizontal competitors include Salesforce for CRM, Intuit for financial products, and Square for payments and HubSpot for marketing-related solutions.payments.

In order to remain competitive, we are continually involved in a number of projects to compete with these new market entrants by developing new services, growing our client base and penetrating new markets. Some of these projects include the expansion of our integration capabilities around our vertical markets, such as field service management, EHR, PM and other solutions. These projects I-15 carry risks, such as cost overruns, delays in delivery, performance problems and lack of acceptance by our clients, which could adversely impact our business, results of operations and financial condition.

We have entered into agreements with certain payment processors, including Worldpay and PayPal, in order to enable our clients’ processing of credit, debit and prepaid card transactions through the card networks, such as Visa and MasterCard. Pursuant to these agreements with payment processors, we are registered with the card networks as an independent sales organization (“ISO”) of our I-15 sponsor bank(s) or as a payment facilitator(s), and are subject to the requirements of our bank sponsors, payment processors, as well as the card network rules and certain other obligations. The payment networks routinely update and modify requirements applicable to merchant acquirers (i.e., sponsor banks) which are passed through to third parties such as ISOs or payment facilitators like us, including rules regarding data integrity, third-party relationships (such as those with respect to bank sponsors and ISOs), merchant chargeback standards and the Payment Card Industry Data Security Standards (“PCI DSS”).

We are also subject to the operating rules of the National Automated Clearing House Association (“NACHA”), a self-regulatory organization which administers and facilitates private-sector operating rules for ACH payments and defines the roles and I-16 responsibilities of financial institutions and other ACH network participants. The NACHA Rules and Operating Guidelines impose obligations on us and our partner financial institutions. These obligations include audit and oversight by the financial institutions and the imposition of mandatory corrective action, including termination, for serious violations. If an audit or self-assessment under NACHA identifies any deficiencies that we need to remediate, the remediation efforts may distract our management team and be expensive and time consuming.

We have been and could in the future be subject to breaches of security by hackers or other malicious actors. Although we proactively employ multiple measures to defend our systems against intrusions and attacks and to protect the data we collect, our measures may not prevent unauthorized access or use of sensitive data. We experienceexperienced cyber-attacks and other security incidents ofinvolving access to IT Systems and Confidential Information, and will continue to experience such attacks and incidents to varying degreesdegrees. fromTo timedate, tono time,attacks thoughor noneincidents whicheither individually or in the aggregate has led to costs or consequences which have materially impacted our operationsoperations, financial condition or business. WeAlthough maywe beand requiredour service providers deploy security measures in relation to expend significant additional resources in our effortsIT toSystems modifyand orConfidential enhanceInformation, our protectiveno measures can guarantee protection against evolvingall threats.cyber-attacks and security incidents. A serious breach of our systemIT Systems, Confidential Information, or a third-party system upon which we rely may subject us to material losses or liability, includingincluding, for example, as a result of the following: payment network fines,fines; assessments and claims for unauthorized purchases with misappropriated credit, debit or card information,information; impersonation or other similar fraud claims.claims; Aregulatory misuseinvestigations, fines and penalties; litigation (including class action) costs, damages and injunctive relief; significant harm to our brand and reputation; loss of such data or a I-18 cybersecurity breach could harm our reputation and deter ourexisting clients and potential clients from using electronic payments generally and our solutions and services specifically, thus reducing our revenue. In addition, any such misuse or breach could cause us to incurrevenue; costs to correct theany breaches or failures,failures; exposeand us tosignificant uninsured liability, increase our risk of regulatory scrutiny, subject us to lawsuitsliabilities and result in the imposition of material penalties and fines under state and federal laws or by the payment networks. While we maintain insurance coverage that may, subject to policy terms and conditions, cover certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses.costs.

Although we generally require that our agreements with our distribution partners and service providers who have access to clientour IT Systems and/or customerConfidential dataInformation include confidentiality obligations that restrict these parties from using such access or disclosing anysuch client or customer datainformation except as necessary to perform their services under the applicable agreements, there can be no assurance that these contractual measures will prevent the unauthorized use or disclosure of businessConfidential or client data,Information, nor can we be sure that such third parties would be willing or able to satisfy liabilities arising from their breach of these agreements. Any failure by such third parties to adequately take these protective measures could result in protracted or costly litigation.

In addition, our agreements with our bank sponsors (as well as payment network requirements) require us to take certain protective measures to ensure the confidentiality of businessConfidential and consumer data.Information. Any failure to adequately comply with these protective measures could result in fees, penalties, litigation or termination of our bank sponsor agreements, and/or registration with the payment card networks.

Our existing general liability and cyber liability insurance policies may not cover, or may cover only a portion of, any potential claims related to security breaches to which we are exposed or may not be adequate to indemnify us for all or any portion of liabilities that may be imposed. We also cannot be certain that our existing insurance coverage will continue to be available on acceptable terms or in amounts sufficient to cover the potentially significant losses that may result from a security incident or breach or that the insurer will not deny coverage of any future claim. Accordingly,We ifattempt to limit by contract our cybersecurityliability, measureshowever, the limitations of liability set forth in the contracts may not be enforceable or otherwise protect us from liability, and thosewe ofmay ouralso servicebe providers, failsubject to protectclaims againstthat unauthorizedare access,not attacks (which may include sophisticated cyber-attacks) and the mishandling of datacovered by our employees and contractors, then our reputation, business, results of operations and financial condition could be adversely affected. In addition, there can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information.contract.

Our use of artificial intelligenceAI technologies may not be beneficial to our business, and may cause the performance of our products, services and business, as well as our reputation and the reputations of our customers, to suffer or cause us to incur liability resulting from the violation of laws or contracts to which we are a party.

We are developing and/or implementing artificial intelligence (“AI”),intelligence, machine learning, and automated decision-making technologies (collectively, “AI Technologies”) throughout our business, and are making significant investments in this area.

In particular, if the models underlying ourthe AI Technologies we use are: incorrectly designed or implemented; trained or reliant on incomplete, inadequate, inaccurate, biased or otherwise poor quality data, or on data to which we do not have sufficient rights or in relation to which we and/or the providers of such data have not implemented sufficient legal compliance measures; used without sufficient oversight and governance to ensure their responsible use; and/or adversely impacted by unforeseen defects, technical challenges, cybersecurity threats or material performance issues, the performance of our products, services and business, as well as our reputation and the reputations of our customers, could suffer or we could incur liability resulting from the violation of laws or contracts to which we are a party or civil claims.

With respect to our products or services that incorporate AI Technology, the market for such products and services is rapidly evolving and unproven in many industries, including our own, and important assumptions about the characteristics of targeted markets, pricing, sales cycles, cost, performance, and perceived value associated with our services or products may be inaccurate. We cannot be sure that the market will continue to grow or that it will grow in ways we anticipate. In addition, market acceptance of products and services that incorporate AI Technology is uncertain. Our failure to successfully develop and commercialize our products or services involving AI Technologies could depress the market price of our stock and impair our ability to: raise capital; expand our business; provide, improve and diversify our product offerings; continue our operations and efficiently manage our operating expenses; and respondcompete effectively toin competitivethe developments.marketplace.

We use AI Technologies licensed from third parties in our technologies and our ability to continue to use such technologies at the scale we need may be dependent on access to specific third-party software and infrastructure. We cannot control the availability or I-19 pricing of such third-party AI Technologies, especially in a highly competitive environment, and we may be unable to negotiate favorable economic terms with the applicable providers. If any such third-party AI Technologies become incompatible with our solutions or unavailable for use, or if the providers of such models unfavorably change the terms on which their AI Technologies are offered or terminate their relationship with us, our solutions may become less appealing to our customers and our business will be harmed. In addition, to the extent any third party AI Technologies are used as a hosted service, anythe service may be subject to disruption, outage, or loss of informationinformation. throughMoreover, suchour hostedown servicesand third-party AI Technologies may have bugs or errors, which could also lead to disruption, outage, or loss of information, unexpected, unreliable or unsatisfactory results, or degradation of our customers’ user experience with our services. In relation to third-party technologies, we may have limited ability to fix any bugs or errors ourselves, and we may not be able to rely on the corresponding providers or others to fix bug and errors in a timely manner or at all. Any of the foregoing could disrupt our operations or solutions, damage our reputation, cause a loss of confidence in our solutions, or result in legal claims or proceedings, for which we may be unable to recover damages from the affectedAI Technology, software, or infrastructure provider.

We estimate the TAM, defined above, for our current solutions for service SMBs was approximately $1.6 trillion globally in 2023, of which approximately $662 billion was in North America, which refers to the United States and Canada. Of the $662 billion, we estimate a $$69$69 billion opportunity in Home Services, a $115 billion opportunity in Health Services, a $22 billion opportunity in Wellness Services and a $456 billion opportunity in other services categories. We have based our estimates on a number of internal and third-party estimates and resources, including, without limitation, third party reports and the experience of our management team across these industries. While we believe our assumptions and the data underlying our estimates are reasonable, these assumptions and I-19 estimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors. As a result, our estimates of the annual total addressable market for our current solutions and services may prove to be incorrect. If third-party or internally generated data prove to be inaccurate or we make errors in our assumptions based on that data, the annual total addressable market for our solutions and services may be smaller than we have estimated, our future growth opportunities and sales growth may be impaired, any of which could have a material adverse effect on our business, financial condition and results of operations.

We also dedicate significant resources to sales and marketing programs. The effectiveness and cost of our online advertising has varied over time and may vary in the future due to competition for key search terms, changes in search engine use and changes in the I-20 search algorithms and rules used by major search engines. These efforts will require us to invest significant financial and other resources. Our business and operating results will be harmed if our sales and marketing efforts do not generate significant increases in revenue.

We believe that maintaining and enhancing our reputation and brand recognition is critical to our relationships with existing clients and the customers or patients that they serve and to our ability to attract new clients. As our marketing efforts depend significantly on positive recommendations and referrals from our current and past SMB customers, a failure to maintain and provide high-quality solutions and services, or a market perception that we do not maintain or provide high-quality solutions and services, may harm our reputation and impair our ability to secure new customers. Any decisions we make regarding regulatory compliance, user privacy, payments and other issues, and any media, legislative or regulatory scrutiny of our business, or our current or former directors, employees, contractors, or vendors, could negatively affect our brands. If we do not successfully maintain and enhance the integrity, quality, efficiency and scalability of our software and systems, as well as our reputation and brand recognition among our customers and the end customers they serve, our business may not grow and we could lose existing customers, which would harm our business, results of operations and financial condition. For example, the success of our digital lead generation capabilities within our EverPro platform depends, in part, on our ability to establish and maintain relationships with quality and trustworthy home service I-20 professionals and home improvement contractors, such as home maintenance technicians and security alarm professionals operating in both residential and commercial settings. We provide our home service professionals with solutions to capture and manage lead generations to residential homeowners and business owners, who in turn want to work with home service professionals whom they can trust to provide quality workmanship. Unsatisfactory work performed by any of our recommended home service professionals could result in bad publicity and related damage to our reputation and/or litigation, which in turn may adversely affect our business, financial condition and results of operations.

While some of our contracts are non-cancelable annual subscription contracts, most of our contracts with clients primarily consist of open-ended arrangements that can be terminated by either party without penalty, generally upon providing 30-day notice. Our clients have no obligation to renew their subscriptions for our solutions and services after the expiration of their subscription period. For us to maintain or improve our operating results, it is important that our customers continue to maintain their subscriptions on the same or more favorable terms. We cannot accurately predict renewal or expansion rates given the diversity of our customer base in terms of size, industry and geography. Our renewal and expansion rates may decline or fluctuate as a result of several factors, including consumer spending levels, client satisfaction with our solutions and services, decreases in the number of users, changes in the type and I-21 size of our customers, pricing changes, competitive conditions, the acquisition of our customers by other companies and general economic conditions. If our customers do not renew their subscriptions, our revenue and other operating results will decline and our business will suffer. If our renewal or expansion rates fall significantly below the expectations of the public market, securities analysts, or investors, the trading price of our common stock would likely decline.

We record goodwill and intangible assets at fair value upon the acquisition of a business. Goodwill represents the excess of amounts paid for acquiring businesses over the fair value of the net assets acquired. The carrying value of goodwill is evaluated for impairment at least annually, or more frequently if conditions warrant, by comparing the carrying value of a reporting unit to its estimated fair value. Intangible assets with definite lives are reviewed for impairment whenever events or circumstances indicate that their carrying value may not be recoverable. Declines in operating results, divestitures, sustained market declines and other factors that impact the fair value of our reporting unit has and may in the future result in an impairment of goodwill or intangible assets and, in turn, a charge I-21 to net income (loss). These charges in the years ended December 31, 20242025 and 20232024 have adversely impacted and any future charges have, and may in the future have a material adverse effect on our results of operations orand financial condition.

During the fourth quarter 2024, in conjunction with our review of strategic alternatives for our Marketingmarketing Technologytechnology Solutions,solutions, and as a result of lower than expected financial performance and future forecasted growth rates we determined that the estimated fair value of our marketing technology solutions reporting unit was insufficient to recover the net carrying value of the reporting unit resulting in an impairment of goodwill of approximately $28.1 million. Additionally, during the year ended December 31, 2025, we recognized a goodwill impairment charge of $6.9 million, related to the sale of marketing technology solutions. In connection with the definitive sale and purchase agreements to sell our Fitness Solutions, we tested the goodwill balance for impairment as of March 31, 2024. During the year ended December 31, 2024, we recognized $6.4 million of goodwill impairment charges representing the allocated goodwill to Fitness Solutions.

Our information technology systems and operations or those of our third-party technology vendors could be exposed to damage or interruption from, among other things, fire, extreme weather events (including floods, storms, droughts and extreme temperatures) and other natural disasters, power loss, telecommunications failure, unauthorized entry, computer viruses, denial-of-service attacks, acts of I-22 terrorism, human error, vandalism or sabotage, financial insolvency and similar events. ExtremeCertain weatherof events,these changing water levels, as well as changes in ambient temperature and precipitation patterns,events may become more frequent or severe as a result of climate change.change or other environmental or social pressures, which may also result in chronic changes (e.g. in meteorological or hydrological patterns) which may have similar effects. Our property and business interruption insurance may not be adequate to compensate us for all losses or failures that may occur, and the cost and availability of such insurance may be adversely impacted to the extent events become more frequent or severe. While we and the third parties upon whom we rely have certain backup systems in place for certain aspects of our respective frameworks, none of our frameworks are fully redundant and disaster recovery planning is not sufficient for all eventualities, particularly given some of the uncertainties associated with longer term projections, including those associated with climate change. Defects in our information technology systems or those of third parties, errors or delays in the processing of payment transactions, telecommunications failures or other difficulties could result in:

Conversely, pandemics, epidemics and outbreaks may significantly and temporarily increase demand in certain industries and markets in which we operate. For example, COVID-19 generally increased demand for, and utilization of, telehealth services, and increased demand from customers shifting to technology-focused, digital-first business models. While such increases may helphelped to offset the decline of business and demand in other industries, there can be no assurance that these levels of interest, demand and use will be similar in any future public health crisis. Federal and state budget shortfalls as a result of a public health crisis could lead to potential reductions in funding for Medicare and Medicaid. Further reductions in reimbursements from Medicare and Medicaid could lead to our Health Services customers postponing expenditures on information technology and related services.

General inflation, including wage inflation, increases in interest rates, currency volatility as well as monetary, fiscal and policy interventions by national or regional governments in anticipation of or reaction to such events could have negative impacts on our business by increasing our operating costs and our borrowing costs as well as decreasing the capital available for our customers to I-23 purchase our solutions and services or the levels of cash we maintain for working capital. The changepolicies inof the United States presidential administration may result in economic volatility or other consequences that adversely impact SMBs or consumer spending and consequently negatively impact our business and results of operations.

Our future success depends upon our ability to attract, train and retain highly skilled employees and contract workers, particularly our management team, sales and marketing personnel, professional services personnel and software engineers. Any of our key personnel have worked for us for a significant amount of time or were recruited by us specifically due to their experience. Our success depends in part upon the reputation and influence within the industry of our senior managers who have, over the years, developed long standing and favorable relationships with our vendors, card associations, bank sponsors and other payment processing and service providers. Each of our executive officers and other key employees may terminate his or her relationship with us at any time and the loss of the services of one or a combination of our senior executives or members of our senior management team, including our Chief Executive Officer, Eric Remer, our President, Matthew Feierstein and our Chief Financial Officer, Ryan Siurek, may significantly delay or prevent the achievement of our business or development objectives and could materially harm our business. Further, contractual I-24 obligations related to confidentiality and assignment of intellectual property rights may be ineffective or unenforceable, and departing employees may share our proprietary information with competitors in ways that could adversely impact us.

Even if we are able to complete acquisitions and other investments, such activities may not ultimately strengthen our competitive position or achieve our strategic goals and could be viewed negatively by existing or prospective customers, investors or other I-25 stakeholders. We may not realize the anticipated benefits of any or all of our acquisitions or other investments in the time frame expected or at all. For example, the process of integrating operations could cause an interruption of, or loss of momentum in, the activities of one or more of our combined businesses and the possible loss of key personnel. Further, acquisitions and consolidations may also disrupt our ongoing business, divert our resources and require significant management attention that would otherwise be available for ongoing development of our current business. Acquisitions can also result in a complex corporate structure with different systems and procedures in place across various acquired entities, particularly during periods in which acquired entities are being integrated or transitioned to our preferred systems and procedures. Initiatives to integrate these disparate systems and procedures can be challenging and costly, and the risk of failure high.

In addition, we may pursue dispositions and other strategic transactions, which could be material. For example, we havecompleted announcedthe a strategic reviewsale of our Marketing Technology Solutions, which may not resultSolutions in athe successfulfourth salequarter orof other dispositions.2025. Dispositions and other strategic transactions may not have the anticipated impact on our business, may negatively impact revenues and may make it difficult to generate cash flows to meet our cash requirements.

As of December 31, 2024,2025, we had cash, cash equivalents and restricted cash of $135.8$129.7 million, $190.0$155.0 million of available borrowing capacity under our New Revolver (as defined in Part II. Item 7. “Management’s Discussion and Analysis of Results of Operation and Financial Condition - Liquidity and Capital Resources”) and $532.1$526.6 million outstanding under our Credit Facilities (as defined in Part II. Item 7. “Management’s Discussion and Analysis of Results of Operation and Financial Condition - Liquidity and Capital Resources”). To service this debt and any additional debt we may incur in the future, we need to generate cash. Our ability to generate cash is subject, to a certain extent, to our ability to successfully execute our business strategy, including acquisition activity, as well as general economic, financial, competitive, regulatory and other factors beyond our control. There can be no assurance that our business will be able to generate sufficient cash flow from operations or that future borrowings or other financing will be available to us in an amount sufficient to enable us to service our debt and fund our other liquidity needs. To the extent we are required to use our cash flow from operations or the proceeds of any future financing to service our debt instead of funding working capital, capital I-26 expenditures, acquisition activity or other general corporate purposes, we will be less able to plan for, or react to, changes in our business, industry and in the economy generally. This will place us at a competitive disadvantage compared to our competitors that have less debt. There can be no assurance that we will be able to refinance any of our debt on commercially reasonable terms or at all, or that the terms of that debt will allow any of the above alternative measures or that these measures would satisfy our scheduled debt service obligations. If we are unable to generate sufficient cash flow to repay or refinance our debt on favorable terms, it could significantly adversely affect our financial condition and the value of our outstanding debt. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.

In addition, under certain circumstances, we will be required to satisfy and maintain a specified financial ratio under the terms of our Credit Facilities. While we have not previously breached and are not in breach of any of these covenants, there can be no guarantee that we will not breach these covenants in the future. Our ability to comply with these covenants and restrictions may be affected by events and factors beyond our control. Our failure to comply with any of these covenants or restrictions could result in an event of default under the terms of our indebtedness. An event of default would permit the lending banks to take certain actions, including terminating all outstanding commitments and declaring all amounts outstanding to be immediately due and payable, including all outstanding borrowings, accrued and unpaid interest thereon and all other amounts owing or payable with respect to such borrowings and any terminated commitments. In addition, the lenders would have the right to proceed against the collateral we granted to them, which includes substantially all of our assets. If payment of outstanding amounts under our Credit Facilities accelerated, our assets I-26 may be insufficient to repay such amounts in full, and our common stockholders could experience a partial or total loss of their investment.

This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting, as well as a statement that our independent registered public accounting firm has issued an opinion on the effectiveness of I-27 our internal control over financial reporting, provided that our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting until our first annual report required to be filed with the SEC following the date (i) we are either an “accelerated filer” or a “large accelerated filer,” each as defined in the Exchange Act, and (ii) we are no longer an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act.Act”). We could be an emerging growth company for up to five years. An independent assessment of the effectiveness of our internal controls could detect problems that our management’s assessment might not. Undetected material weaknesses in our internal controls could lead to financial statement restatements and require us to incur the expense of remediation. We are also required to disclose changes made in our internal control and procedures on a quarterly basis. To comply with the requirements of being a public company, we may need to undertake various actions, such as implementing new internal controls and procedures and hiring accounting or internal audit staff.

The material weakness will not be considered remediated until our remediation plan has been fully implemented, the applicable controls operate for a sufficient period of time, and we have concluded, through testing, that the newly implemented and enhanced controls are operating effectively. At this time, we cannot predict the success of such efforts or the outcome of our assessment of the remediation efforts. We can give no assurance that our efforts will remediate this material weakness in our internal control over financial reporting, or that additional material weaknesses will not be identified in the future. Our failure to implement and maintain effective internal control over financial reporting could result in errors in our consolidated financial statements that could result in a restatement of our financial statements, and could cause us to fail to meet our reporting obligations, any of which could diminish I-27 investor confidence in us and cause a decline in the price of our common stock. Additionally, ineffective internal control could expose us to an increased risk of financial reporting fraud and the misappropriation of assets and subject us to potential delisting from the stock exchange on which we list or to other regulatory investigations and civil or criminal sanctions.

Unless the context requires otherwise, references in this report to "EverCommerce Inc.," the “Company,” “we,” “us” and “our” refer to EverCommerce Inc. and its consolidated subsidiaries. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. AnUnless analysisotherwise ofnoted, ourdisclosures resultswithin ofItem operations7. and cash flows for the year ended December 31, 2022, including a discussion of the year ended December 31, 2023 as compared to the year ended December 31, 2022, has been reported previously in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (“SEC”) on March 14, 2024, under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”Operations relate solely to the Company’s continuing operations, which excludes marketing technology solutions.

EverCommerce is a leading provider of integrated, vertically-tailored software-as-a-service (“SaaS”) solutions for service-based small- and medium-sized businesses (“service SMBs”). Our platform spans across the full lifecycle of interactions between consumers and service professionals with vertical-specific applications. Today,As of December 31, 2025, we serveserved more than 740,000745,000 customers across three core verticals: EverPro for Home Services; EverHealth for Health Services; and EverWell for Wellness Services. Within our core verticals, our customers operate within numerous micro-verticals, ranging from home service professionals, such as home improvement contractors and home maintenance technicians, to physician practices and therapists within Health Services, to salon owners within Wellness. Our platform provides vertically-tailored SaaS solutions that address service SMBs’ increasingly specialized demands, as well as highly complementary solutions that provide fully-integrated offerings, allowing service SMBs and EverCommerce to succeed in the market, and provide end consumers more convenient service experiences.

•Business Management Software: Our vertically-tailored Business Management Software is the system of action at the center of a service business’s operation, and is typically the point-of-entry and first solution adopted by a customer. Our software, designed to meet the day-to-day workflow needs of businesses in specific vertical end markets, streamlines front and back-office processes and provides polished customer-facing experiences. Using these offerings, service SMBs can deliver their services, streamline operations and focus on growing their customers,customer improving their services and driving more efficient operations.base.

•Customer Experience Solutions: Our Customer Experience Solutions modernize how businesses engage and interact with customers by leveraging innovative, bespoke customer listening and communication solutions to improve the customer experience and increase retention. Our software provides customer listening capabilities with real-time customer surveying and analysis to allow standalone businesses and multi-location brands to receive VoC insights and manage the customer experience lifecycle. These applications include: customer health scoring, customer support systems, real-time alerts, NPS-based customer feedback collection, review generation and automation, reputation management, customer satisfaction surveying and a digital communication suite, among others. TheseAdditionally, the recent acquisition of ZyraTalk (as defined below) provides virtual assistant capabilities with an agentic automation platform. ZyraTalk offers production-ready fully autonomous AI agents and field service management systems designed for seamless integration across our Home Services solutions and improving the overall prospect and customer experience. Collectively, these tools help our customers gain actionable insights, increase customer loyalty and repeat purchases and improve customer experiences.

We go to market with suites of solutions that are aligned to our three core verticals. Within each suite, our Business Management Software – the system of action at the center of a service business’ operation – is typically the first solution adopted by a customer. This vertically-tailored point-of-entry provides us with an opportunity to cross-sell adjacent products, previously offered as fragmented and disjointed point solutions by other software providers. This “land and expand” strategy allows us to acquire customers with key foundational solutions and expand into offerings via product development and acquisitions that cover all workflows and power the full scope of our customers’ businesses. This results in a self-reinforcing flywheel effect, enabling us to drive value for our customers and, in turn, fuel growth, improve customer stickiness, and increase our market share and fuel our growth.share.

WeOur continuing operations generate threetwo types of revenue: (i) Subscription and Transaction Fees, which are primarily recurring revenue streams, and (ii) Marketing Technology Solutions, which includes both recurring and re-occurring revenue streams and (iii) Other revenuerevenue, which consists primarily of one-time revenue streams. Our recurring revenue generally consists of monthly, quarterly and annual software and maintenance subscriptions,subscriptions and transaction revenue associated with integrated payments and billing solutions and monthly contracts for Marketing Technology Solutions. Additionally, our re-occurring revenue includes revenue related to the sale of marketing campaigns and lead generation under contractual arrangements with customers.solutions.

•Subscription and Transaction Fees revenue includes: (i) recurring monthly, quarterly and annual SaaS subscriptions and software license and maintenance fees from the sale of our Business Management,Management and Customer Engagement andsolutions; (ii) Billing and Payment solutions; (ii)- payment processing fees based on the transaction volumes processed through our integrated payment solutions and processing fees based on transaction volumes for our revenue cycle management, chronic care management and health insurance clearinghouse solutions; and (iii) membership subscriptions and our share of rebates from suppliers generated though group purchasing programs.

Our business benefits from attractive unit economics. Approximately 96%, 97% and 96% of our revenue was recurring or re-occurring in both of the years ended December 31, 2025, 2024 and 2023, respectively, and we maintained an annualized net revenue retention rate of approximately 96%, 91% and 93% for the quarters ended December 31, 2025, 2024 and 2023, respectively. Our annualized pro forma net revenue retention rate was equal to the annualized net revenue retention rate for theall quartersperiods ended December 31, 2024 and 2023, respectively.presented. Excluding our marketing technology solutions, our annualized net revenue retention rate for our core software and payments solutions was approximately 96% and 98% for the quarters ended December 31, 2024 and 2023, respectively. We believe the retention and growth of revenue from our existing customers is a helpful measure of the health of our business and our future growth prospects. Our ability to cross sell additional products and services to our existing customers can increase customer engagement with our suite of solutions and thus have a positive impact on our net pro forma revenue retention rate. For example, we have leveraged our land and expand strategy to cross sell solutions to our existing customers, which has supported our high net pro forma revenue retention rate by increasing customer utilization of our solutions, educating customers as to how our platform and synergies can support their businesses and, in turn, improving customer stickiness.

We calculate our annualized net revenue retention rate based on the average of the annualized net revenue retention rate calculated for each month during the twelve-month period as of the most recent quarter end. Our calculation of net revenue retention rate for any fiscal period includes the positive recurring and re-occurring revenue impacts of selling new solutions to existing customers and the negative impacts of contraction and attrition among this set of customers. The annualized net revenue retention rate for a particular month is calculated as the recurring or re-occurring revenue gained/lost from existing customers, less the recurring or re-occurring revenue lost from cancelled customers as a percentage of total recurring or re-occurring revenue during the corresponding month of the prior year. For existing customers, we consider customers that existed 11 or more months prior to the current month and that do not have an end date (i.e., cancelled relationship) on or after the first day of the current month. For example, the recurring or re-occurring revenue gained/lost from existing customers in November 20242025 is the difference between the recurring or re-occurring revenue generated in November 20242025 and the same such revenue generated in November 2023,2024, for customers with a start date prior to December 1, 20232024 and no end date or cancelled relationship on or after November 1, 2024.2025. For cancelled customers, we examine customers that cancelled their relationships on or after the first day of the month that is 12 months prior to the current month and II-4 before the first day of the current month. For example, the recurring or reoccurring revenue lost from cancelled customers in November 20242025 is the difference between the recurring or re-occurring revenue generated in November 20242025 and the same such revenue generated in November 2023,2024, for customers that cancelled on or after November 1, 20232024 and before November 1, 2024.2025. The annualized pro forma net revenue retention is calculated as the annualized net revenue retention rate adjusted as though acquisitions and dispositions that were closed during the prior period presented were closed on the first day of such period presented. Our annualized net revenue retention rate and pro forma net revenue retention rate may fluctuate as a result of a number of factors, including the growing level of our revenue base, the level of penetration within our customer base, expansion of solutions, new acquisitions and dispositions and our ability to retain our customers. Our calculation of annualized net revenue retention rate and annualized pro forma net revenue retention rate may differ from similarly titled metrics presented by other companies.

The macroeconomic climate has seen in the recent years, and may continue to see, pressure from global developments such as international geopolitical conflicts, increased tariffs and proposed tariffs between the United States and other nations,nations as well as uncertainty as to future tariffs, terrorism, pandemics or health crises, rising inflation, fluctuations in the value of the US Dollar, rising interest rates and supply chain disruptions. These developments have had and may continue to have an adverse effect on our revenues and demand for our products and services, as well as on our costs of doing business. We have taken and will continue to take actions to help mitigate the impact of these economic challenges, but there can be no assurance as to the effectiveness of our efforts going forward.

On March 13, 2024, we entered into definitive sale and purchase agreements to sell our fitness solutions, comprised of North American Fitness and UK Fitness (“Fitness Solutions”), to Jonas Software (see Note 3. AcquisitionsAcquisition and Dispositions included in this Annual Report on Form 10-K). The sale of North American Fitness closed simultaneously with signing and the sale of UK Fitness closed July 1, 2024. The divestiture did not qualify for reporting as a discontinued operation and therefore, its results were included in our unaudited condensed consolidated financial statements included in this Annual Report on Form 10-K through the applicable date of sale. During the year ended December 31, 2024, we recognized losses of $4.9 million related to the sale of Fitness Solutions, which are included in loss on sale and impairments on our consolidated statements of operations and comprehensive income (loss) included in this Annual Report on Form 10-K. During the year ended December 31, 2024, we recognized $6.4 million of goodwill impairment charges representing the allocated goodwill to Fitness Solutions, which is included in loss on sale and impairments on the consolidated statements of operations and comprehensive income (loss) included in this Annual Report on Form 10-K.

Sustaining our growth requires continued adoption of our solutions by new customers. Through organic growth of our business, the number of customers on our platform increased to approximately 740,000745,000 at the end of 2024.2025. Excluding the customers associated with the sale of our fitnessmarketing assets,technology solutions, we served more than 690,000725,000 customers at the end of 20232024 (see Note 3. AcquisitionsAcquisition and Dispositions included in this Annual Report on Form 10-K). We will continue to invest in our efficient go-to-market strategy as we further penetrate our addressable markets. Our financial performance will depend in large part on the overall demand for our solutions from service SMBs.

We believe we have the opportunity to drive incremental revenue growth from our existing customer base through increased cross-selling and up-selling adjacent solutions. Our integrated SaaS solutions allow us to offer customers additional capabilities across their entire customer engagement lifecycle including digital payments,payments and customer engagement and marketing technology.engagement. As we continue to develop, acquire and transform our solutions, we aim to continue adding value to our customers by displacing point-solution competitors and legacy, manual methods with our integrated digital offerings, increasing our revenue and improving customer experience and retention. A primary focus for revenue expansion focuses on cross-selling payments solutions to customers in an effort to prioritize margin growth. We also generate subscription and marketing technology revenue from cross-selling our Customer II-5 Engagement and Marketing Technology Solutionssolutions across our customer base. TheseThe acquisition of ZyraTalk helps to establish our position as an AI-driven innovator with many in-production features that are being sold to third-party customers. We plan to add more innovative features and offerings to support our customers, beginning with integration into many EverPro systems of action with additional use cases across our other verticals. Collectively, these solutions increase customer loyalty, repeat purchases, improve customer experiences and help businesses to manage campaigns and generate quality leads.

In 2024,2025, we continued to invest in scalable operations, including vertical market leadership, and necessary functions to support operating as a public company, including Sarbanes-Oxley compliance. Additionally, we continued to evaluate our suite of solutions and strategic options to drive investment in our highest growth solutions while simplifying our business to align with our transformation initiatives, including the divestiture of Fitnessour Solutions.marketing technology solutions. The recent acquisition of ZyraTalk was a strategic investment to advance the deployment of AI capabilities to our customers. In 20252026 and beyond, incremental investments will be needed to support the ongoing transformation of our business and infrastructure, including Sarbanes-Oxley compliance. As part of our transformation initiatives, we expect to continue to evaluate our suite of solutions and may pursue dispositionsdivestitures of non-core assets and other strategic transactions. In March 2025, the Company announced the evaluation of strategic alternatives for our Marketing Technology Solutions with an expectation of a probable disposition by sale in 2025. The Company expects to reflect Marketing Technology Solutions as discontinued operations beginning with its first quarter 2025 financial reporting.

Although we expect to continue to acquire companies and other assets in the future, such acquisitions pose a number of challenges and risks. For additional information, see Part I. Item 1A. “Risk Factors—Risks Related to Our Business—Our recent growth rates may not be sustainable or indicative of future growth,” “—We may be unsuccessful in achieving our objectives through acquisitions, dispositions or other strategic transactions” and “—Revenues and profits generated through acquisitions may be less than anticipated, and we may fail to uncover all liabilities of acquisition targets through the due diligence process prior to an acquisition, resulting in unanticipated costs, losses or a decline in profits, as well as potential impairment charges. Claims against us relating to any acquisition may necessitate our seeking claims against the seller for which the seller may not indemnify us or that may exceed the seller’s indemnification obligations.”

In addition to our results and measures of performance determined in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), we believe the following key business and non-GAAP financial measures are useful in evaluating and comparing our financial and operational performance over multiple periods, identifying trends affecting our business, formulating business plans and making strategic decisions. The information presented in the following sections within Key Business and Financial Metrics is calculated on the basis of US GAAP results from continuing operations for all periods presented, which excludes discontinued operations, if any.

Revenue and Pro Forma Revenue Growth Rate

Our Revenue Growth Rate was 3.5%4.8% and 5.1% for the yearyears ended December 31, 2025 and 2024 as compared to the prior year ended December 31, 2023.periods. Total revenues include post-acquisition revenue from Kickserv,ZyraTalk, which was acquired AugustSeptember 10,15, 20232025 (see Note 3. AcquisitionsAcquisition and Dispositions in this Annual Report on Form 10-K), of $3.0 million and $1.0$1.2 million during the yearsyear ended December 31, 2024 and 2023, respectively.2025. Additionally, total revenues include pre-divestiture revenue from Fitness Solutions, which was divested in 2024 (see Note 3. AcquisitionsAcquisition and Dispositions in this Annual Report on Form 10-K), of $8.1 and $23.7 million during the years ended December 31, 2024 and 2023, respectively. Total revenues also include post-acquisition revenue from Kickserv, which was acquired on August 10, 2023, of $3.0 million and $23.7$1.0 million during the years ended December 31, 2024 and 2023, respectively. Our Pro Forma Revenue Growth rate was 5.7%6.4% and 8.5% for the yearyears ended December 31, 2025 and 2024, reflective of the underlying growth in our business as a result of new customers and providing more solutions to existing customers.

Adjusted EBITDA is calculated as net income (loss) adjusted to exclude interest and other expense, net, income tax expense (benefit), depreciation and amortization, other amortization, stock-based compensation expense and transaction-related and other non-recurring or unusual costs. Other amortization includes amortization for capitalized contract acquisition costs. Transaction-related costs are specific deal-related costs such as legal fees, financial and tax due diligence, consulting and escrow fees. Other non-recurring or unusual costs are expenses such as impairment charges, (gains) losses from divestitures, system implementation costs including amortization of cloud-based software implementation costs, executive separation costs, severance expense related to planned restructuring activities, and costs associated with integration and transformational improvements. Transaction-related and other non-recurring or unusual costs are excluded as they are not representative of our underlying operating performance.

We derive our revenue from threetwo primary sources which are described in detail below: (i) Subscription and Transaction Fees, which are primarily recurring revenue streams, (ii) Marketing Technology Solutions, which includes both recurring and re-occurring revenue streams and (iiiii) Other revenue, which consists primarily of the sale of distinct professional services and hardware. Our revenue recognition policies are discussed in more detail under “Critical Accounting Estimates.”

Subscription and Transaction Fees: Revenue includes (i) recurring monthly, quarterly and annual SaaS subscriptions and software license and maintenance fees from the sale of our Business Management,Management and Customer Engagement and Billing and Payment solutions; (ii) Billing and payment solutions - payment processing fees based on the transaction volumes processed through our integrated payment solutions, and processing fees based on transaction volumes for our revenue cycle management, chronic care management and health insurance clearinghouse solutions; and (iii) membership subscriptions and our share of rebates from suppliers generated though group purchasing programs. Our revenue from payment processing fees is recorded net of credit card and ACH processing and interchange charges in the month the services are performed.

Cost of revenue (exclusive of depreciation and amortization) consists of expenses related to delivering our services and products and providing support to our customers and includes employee costs and related overhead, customer credit card processing fees, targeted mail costs, third partythird-party fulfillment costs and software hosting expenses.

We expect that cost of revenue as a percentage of revenue will fluctuate from period to period based on a variety of factors, including the mixrate of revenuegrowth betweenof Subscriptionsubscription and Transactiontransaction Fees and Marketing Technology Solutions,fees, labor costs, third-party expenses and acquisitions. In particular, Marketing Technology Solutions revenue generally has a higher cost of revenue as a percentage of revenue than our subscriptionacquisitions and transactiondispositions. fee revenue. For the year ended December 31, 2024, revenueRevenue from subscription and transaction fees increased 4.4%, 5.4% and 11.9% for the years ended December 31, 2025, 2024 and 2023, respectively, compared to the prior year ended December 31, 2023, whereas Marketing Technology Solutions revenue decreased 2.9%. To the extent our Marketing Technology Solutions revenue grows at a faster rate, whether by acquisition or otherwise, than our Subscription and Transaction Fees revenue, it could negatively impact our cost of revenues as a percentage of revenue.periods.

Sales and marketing expense consists primarily of employee costs for our sales and marketing personnel, including salaries, benefits, bonuses, stock-based compensation and sales commissions. Sales and marketing expenses also include advertising costs, travel-related expenses and costs to market and promote our products, direct customer acquisition costs, costs related to conferences and events and partner/broker commissions. Software and subscription services dedicated for use by our sales and marketing organization, and outside services contracted for sales and marketing purposes are also included in sales and marketing expense. Sales commissions that are incremental to obtaining a customer contract are deferred and amortized ratably over the estimated period of our relationship with that customer. We expect our sales and marketing expenses from continuing operations will increase in absolute dollars and may increase as a percentage of revenue for the foreseeable future as we continue to increase investments to support our growth.

Product development expense consists primarily of employee costs for our product development personnel, including salaries, benefits, stock-based compensation and bonuses. Product development expenses also include third-party outsourced technology costs incurred in developing our platforms, and computer equipment, software and subscription services dedicated for use by our product development organization. We expect our product development expenses from continuing operations to increase in absolute dollars and increase as a percentage of revenue during 20252026 as we continue to dedicate substantial resources to develop, improve and expand the functionality of our solutions.

Loss on sale relates to the divestiture of marketing technology solutions and Fitness Solutions. Impairments include goodwill impairment charges and operating lease impairments related to the Company’s decision to cease use of certain leased premises and sublease certain facilities.

Interest and Other Expense,Income (Expense), net

Interest and other expense,income (expense), net, primarily consists of interest expense on long-term debt, net of interest income. It also includes amortization expense of financing costs and discounts, income from the TSA, as well as realized and unrealized gains and losses related to interest rate swap agreements.

Income Tax (Expense) Benefit

Comparison of the years ended December 31, 2025, 2024 and 2023

Comparison of the years ended December 31, 2025, 2024 and 2023 (percentage of revenue)

The following table provides the key components of operating costs within our results of operations as a percentage of revenue for the year ended December 31, 20242025 compared to the same periodperiods in 2024 and 2023.

While revenue growth remains a key focus, we remain committed to continued expansion of gross margin, net income and Adjusted EBITDA through ongoing transformation initiatives. As a percentage of revenue, cost of revenues declinedincreased from 34.2%22.2% for the year ended December 31, 20232024 to 32.7%22.4% for the year ended December 31, 2024,2025, an improvementincrease of approximately 15020 basis points resulting in higher gross margin.points. Additionally, the combination of cost of revenue, sales and marketing, product development and general and administrative costs declined from 83.3%78.9% for the year ended December 31, 20232024 to 81.6%78.5% for the year ended December 31, 2024,2025, an improvement of approximately 17040 basis points. A discussion on primary drivers of cost reductions resulting in improved margin follows in the subsequent sections.

Revenues increased $23.4$26.7 million, or 3.5%,4.8%, for the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024. The growth of revenueRevenues from subscription and transaction fees wasincreased 5.4%4.4% and other revenue increased 14.5% during the year ended December 31, 20242025, respectively, as compared to the prior year period, while the changes in marketing technology solutions and other revenues experienced more volatility in revenue generation than the delivery of services through our system of actions.period. The majority of our revenue growth is attributable to the successful delivery of system of action capabilities to our SMBs in our verticals of home services, health and wellness. The subscription and transaction fees revenue increasesincrease during the year ended December 31, 2024 consistconsists primarily of increases from (a) business management software and (b) billing and payment solutions.solutions, partially offset by (c) revenues associated with our share of rebates from suppliers generated through II-12 group purchase programs. Business management software revenues drove a $24.8$22.9 million increase in subscription and transaction revenuesfees revenue due to an expansion in our number of customers,customers and certain price increases across our portfolio, and an increase in rebate revenue from contracted suppliers due to growth of membership subscriptions in group purchasing programs.portfolio. Billing and payment solutions revenues drove an increase of $3.3$3.1 million, which was primarily due to higher transaction volumes processed through our payment platforms, partially offset by lower revenue in 2024 due to the Fitness Solutions divestiture. Revenues associated with our share of rebates from suppliers generated through group purchasing programs declined by $2.1 million, which is more closely connected to macro-economic impacts than our core business management software. Subscription and transaction revenuesfees revenue also includeincludes $3.0$1.2 million and $1.0 million of post-acquisition revenue from KickservZyraTalk for the yearsyear ended December 31, 2024 and 2023, respectively,2025, and pre-divestiture revenue from Fitness Solutions of $8.0 million and $23.3 million for the yearsyear ended December 31, 2024 and 2023, respectively (see Note 3. AcquisitionsAcquisition and Dispositions in this Annual Report on Form 10-K). Marketing technology solutionsOther revenues decreasedincreased $3.9$2.8 million during the year ended December 31, 2024, II-12 which was primarily due to a reduction in demand driven by decreases in consumer spending, partially offset by certain price increases and customer growth related to lead generation services. Other revenues decreased $0.8 million during the year ended December 31, 20242025 driven by revenue related to project implementation and customer development services which did not recur in the current year.services.

Cost of revenues decreasedincreased by $2.6$7.3 million, or 1.1%,5.8%, for the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024. The decreaseincrease iswas primarily compriseddriven ofby an additional $4.3 million in API fees and software hosting expenses, a $5.7$3.1 million decreaseincrease in personnelcommunication services expenses, $1.2 million in campaign mail and compensationadvertising expense,expenses, a $1.7$0.6 million reductionin software and tools and $0.2 million in outsourced services, and a $0.8 million reduction in lead generation and ad spend subject to resale to customers, partially offset by a $2.1reduction of $2.6 million increase in softwareclearinghouse hosting expense, a $1.9 million increase in application programming interface fees, and a $0.9 million increase in campaign mail expense.fees.

Sales and marketing expenses decreasedincreased by $1.1$5.4 million, or 0.9%,4.7%, for the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024. The decreaseincrease was driven primarily by aan $1.7additional $7.0 million reduction in personnel and compensation expense, a $1.2$1.1 million reductionincrease in third-partyconsulting commissions,and outsourced services, and a $0.5 million increase in stock-based compensation. These increases were partially offset by a $0.7$1.7 million increasedecrease in commissions related to volume from third-party channels associated with legacy payment platform solutions, a $1.0 million decrease in advertising, $0.8and $0.7 million increasedecrease in outsourced servicessoftware and $0.3 million in professional fees and consulting expenses.tools.

Product development expenses increased by $4.1$2.8 million, or 5.4%,3.7%, for the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024. The increase was adriven resultprimarily ofby an additional $2.2$4.1 million of personnel and compensation expense, $2.0 million ofin outsourced services,services andas $1.6we continue to execute against our transformation strategy for cost optimization, $1.1 million of software and tools, driven by investments in our technology and teams to support our various solutions as well as centralized security operations, information technology and cloud engineering.engineering, Theand increase$0.5 wasmillion in higher stock-based compensation expense. These increases were partially offset by a $1.5$3.0 million decreasereduction in professional feespersonnel and consultingcompensation expenses.

Our business benefits from attractive unit economics. Approximately 96%97% of our revenue was recurring or re-occurring in both the threesix months ended MarchJune 31,30, 2026 and 2025, and we maintained an annualized net revenue retention rate of approximately 95%94% and 97% for the quarters ended MarchJune 31,30, 2026 and 2025, respectively. Our annualized pro forma net revenue retention rate was equal to the annualized net revenue retention rate for the quarters ended MarchJune 31,30, 2026 and 2025, respectively, as the acquisitions and dispositions closed during the prior period were not material to our prior period unaudited condensed consolidated results on a pro forma basis. We believe the retention and growth of revenue from our existing customers is a helpful measure of the health of our business and our future growth prospects. Our ability to cross sell additional products and services to our existing customers can increase customer engagement with our suite of solutions and thus have a positive impact on our net pro forma revenue retention rate. For example, we have leveraged our land and expand strategy to cross sell solutions to our existing customers, which has supported our high net pro forma revenue retention rate by increasing customer utilization of our solutions, educating customers as to how our platform and synergies can support their businesses and, in turn, improving customer stickiness.

On October 31, 2025, we completed the sale of our marketing technology solutions business to Ignite Visibility for approximately $45.0 million in cash (see Note 3. Acquisition and Disposition in this Quarterly Report on Form 10-Q). We determined that our decision to sell marketing technology solutions met the criteria for classification as discontinued operations. As a result, their operating results are presented as discontinued operations in our unaudited condensed consolidated statements of operations and comprehensive income (loss) for all periods presented through the date of sale. During the three and six months ended MarchJune 31,30, 2025, we recognizedmeasured anthe impairmentassets chargeand liabilities of $9.4the marketing technology disposal group at estimated fair value less cost to sell and recognized a gain of $0.4 million and a loss of $2.2 million, comprisedrespectively, ofand a goodwill impairment charge of $6.9 million and a valuation allowance of $2.6 million to adjustduring the carryingsix valuemonths ofended theJune marketing30, technology disposal group to estimated fair value less cost to sell,2025, which isare included in (gain) loss on held for sale and impairments within discontinued operations on our unaudited condensed consolidated statements of operations and comprehensive income (loss).income.

Our Revenue Growth Rate was 3.6%2.7% and 3.2% for the three and six months ended MarchJune 31,30, 2026.2026, respectively. Total revenues include post-acquisition revenue from ZyraTalk, which was acquired September 15, 2025 (see Note 3. Acquisition and Disposition in this Quarterly Report on Form 10-Q), of $0.9 million and $1.8 million during the three and six months ended MarchJune 31,30, 2026.2026, respectively. Our Pro Forma Revenue Growth rate was 3.0%2.0% and 2.5% for the three and six months ended MarchJune 31,30, 2026, reflective of the underlying growth in our business as a result of new customers and providing more solutions to existing customers.

We expect that cost of revenue as a percentage of revenue will fluctuate from period to period based on a variety of factors, including the rate of growth of subscription and transaction fees, labor costs, third-party expenses and acquisitions and dispositions. For the three and six months ended MarchJune 31,30, 2026, revenue from subscription and transaction fees increased 3.2% and 3.1%, respectively, compared to the prior year period.

Comparison of the three and six months ended MarchJune 31,30, 2026 and 2025

Comparison of the three and six months ended MarchJune 31,30, 2026 and 2025 (percentage of revenue)

The following table provides the key components of operating costs within our results of operations as a percentage of revenue for the three and six months ended MarchJune 31,30, 2026 compared to the same period in 2025.

While revenue growth remains a key focus, we remain committed to continued expansion of gross margin, net income and Adjusted EBITDA through ongoing transformation initiatives. As a percentage of revenue, the combination of cost of revenue, sales and marketing, product development and general and administrative costs increased from 78.1% for the threesix months ended MarchJune 31,30, 2025 to 81.2%79.8% for the threesix months ended MarchJune 31,30, 2026, an increase of 310170 basis points representing targeted investments for future growth inclusive of costs associated with the ZyraTalk acquisition subsequent to the acquisition date. A discussion on primary drivers follows in the subsequent sections.

Revenues increased $5.2$4.0 million, or 3.6%,2.7%, and $9.2 million, or 3.2%, for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025. Revenue from subscription and transaction fees increased 3.2% and 3.1% and other revenue decreased 9.8% and increased 19.4%3.8% during the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the prior year period.periods. The majority of our revenue growth is attributable to the successful delivery of system of action capabilities to our SMBs in our verticals of home services, primarily associated with our security and alarm products,services as well as our EverHealth product portfolio. The subscription and transaction fees revenue increase consists primarily of increases from (a) business management software,software and (b) billing and payment solutions, partially offset by a decrease in (b) billing and payment solutions and (c) revenues associated with our share of rebates from suppliers generated through group purchase programs. Business management software revenues drove a $5.9$3.6 million and $9.5 million increase in subscription and transaction fees revenue for the three and six months ended MarchJune 31,30, 20262026, respectively, due primarily to anhigher expansionrevenue inper our number of customers and certain price increases across our portfolio.customer. Billing and payment solutions revenues decreasedincreased $0.7$1.5 million and $0.8 million during the three and six months ended MarchJune 31,30, 20262026, respectively, primarily due to aan reductionincrease in take rate on slightly higher total payments volume processed through our payment platforms.platforms and slightly higher take rate. Revenues associated with our share of rebates from suppliers generated through group purchasing programs, which is more closely connected to macro-economic impacts than our core business management software, declined by $0.8$0.6 million and $1.4 million during the three and six months ended MarchJune 31,30, 2026.2026, respectively. Subscription and transaction fees revenue also includes $0.9 million and $1.8 million of post-acquisition revenue from ZyraTalk for the three and six months ended MarchJune 31,30, 20262026, respectively, (see Note 3. Acquisition and Disposition in this Quarterly Report on Form 10-Q). Other revenues decreased $0.5 million and increased $0.9$0.4 million during the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025, primarily driven by highertiming of revenues related to project implementation and customer development services.

Cost of revenues increaseddecreased by $1.5$0.9 million, or 4.8%,2.6%, and increased by $0.6 million, or 1.0%, for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025. The increasedecrease for the three-month period was primarily compriseddue of an additional $1.7 million in software hosting expenses, $0.4 million in application programming interface fees, $0.2 million in software and tools, and $0.2 million in communication services expenses. These increases were partially offset byto a $0.7 million decrease in personnel and compensation expensesexpenses. Cost of revenues remained relatively consistent in the six-month period as compared to the prior year period and declined by 40 basis points as a $0.5percentage millionof decrease in outsourced services.revenue. Cost of revenues includes $0.2 million and $0.4 million of post-acquisition expense from ZyraTalk for the three and six months ended MarchJune 31,30, 20262026, respectively, (see Note 3. Acquisition and Disposition in this Quarterly Report on Form 10-Q).

Sales and marketing expenses increased $4.3$3.1 million, or 15.0%,10.2%, and $7.4 million, or 12.5%, for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025. The increaseincreases waswere driven primarily by an additional $3.5$2.7 million and $6.2 million in personnel and compensation expensesexpenses, respectively, and $0.8$2.3 million and $3.2 million in advertising expense.expense, respectively. These increases were partially offset by a $2.2 million and $3.0 million decrease in commissions related to volume from third-party channels associated with legacy payment platform solutions, respectively. Sales and marketing expenses include $0.5 million and $1.0 million of post-acquisition expense from ZyraTalk for the three and six months ended MarchJune 31,30, 20262026, respectively, (see Note 3. Acquisition and Disposition in this Quarterly Report on Form 10-Q).

Product development expenses increased by $1.2$1.9 million, or 6.2%,9.7%, and $3.1 million, or 7.9%, for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025. TheThese increaseincreases waswere primarilya comprisedresult of ancontinued additional $0.8 million in software and tools, driven by investmentsinvestment in our technology and teams to support our various solutions as well as centralized security operations, information technology and cloud engineering, awith $0.3an additional $0.6 million increaseand $1.4 million in software and tools, respectively, $0.7 million and $0.5 million in outsourced services, respectively, $0.2 million and $0.5 million in personnel and compensation expenses, respectively, and a $0.2 million increaseand $0.4 million in stock-based compensation.compensation, respectively. Product developments expenses include $0.4$0.7 million and $1.1 million of post-acquisition expense from ZyraTalk for the three and six months ended MarchJune 31,30, 20262026, respectively, (see Note 3. Acquisition and Disposition in this Quarterly Report on Form 10-Q).

General and administrative expenses increaseddecreased by $1.4$0.5 million, or 4.4%,1.5%, and increased by $0.9 million, or 1.4%, for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025. TheGeneral increaseand wasadministrative drivenexpenses primarilyremained byrelatively an additional $1.1 millionconsistent in personnelthe three and compensationsix-month expense,periods $1.1as million of contingent consideration relatedcompared to the ZyraTalkprior transaction,year $0.8periods millionand indeclined outsourcedby services90 basis points and 30 basis points as we continue to execute against our transformation strategy for cost optimization, and $0.8 million in software and tools. These increases were partially offset by a $1.1percentage millionof reductionrevenue, in stock-based compensation, a $1.0 million decrease in professional and legal fees, and a $0.3 million decrease in insurance expense.respectively. General and administrative expenses include $1.4 million and $2.8 million of post-acquisition expense from ZyraTalk for the three and six months ended MarchJune 31,30, 20262026, respectively, (see Note 3. Acquisition and Disposition in this Quarterly Report on Form 10-Q).

Depreciation and amortization expenses decreased by $1.7$1.3 million, or 9.9%,8.0%, and $3.0 million, or 8.9%, for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025. The decrease for the three and six-month periods was driven primarily by lower intangible assets’ amortization due to the reduced rate of replacement assets resulting from a slowdown in business acquisitions. Specifically, the decrease was driven by $2.4$2.5 million and $5.0 million in lower intangible assets’ amortizationamortization, and a decrease of $0.1 million of property and equipment depreciation,respectively, partially offset by $0.9$1.2 million and $2.1 million of additional capitalized software amortization.amortization, respectively.

During the threesix months ended MarchJune 31,30, 2026 we recorded right-of-use lease asset impairments charges of $0.1 million (see Note 9. Leases in this Quarterly Report on Form 10-Q). During the threesix months ended MarchJune 31,30, 2025, we recorded a $0.1 million working capital adjustment related to the disposal of fitness solutions in 2024.

Interest and other expense, net, decreased by $8.0$2.5 million, or 62.6%,28.6%, and $10.5 million, or 48.7%, for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025, with the changes primarily driven by volatility of interest rates and foreign currency. The decrease for the three-month period was driven by an unrealized gain on interest rate swaps of $3.0$2.1 million compared to an unrealized loss of $3.9$2.1 million in the comparative period, a year over year decrease of $6.9$4.2 million as a result of the fair value change in interest rate swaps. Additionally, interest expense on long-term debt decreased $0.6$0.7 million as a result of lower variable base interest rates on the Company’s Credit Facilities, aand $0.5 million decrease in unrealized foreign currency loss, $0.5$0.3 million of income related to support services provided under the TSA with Ignite Visibility, partially offset by a $0.5$2.5 million year over year decrease in unrealized foreign currency gain, and a $0.4 million decrease in interest income. The decrease for the six-month period was driven primarily by an unrealized gain on interest rate swaps of $5.0 million compared to an unrealized loss of $6.0 million in the comparative period, a year over year decrease of $11.0 million as a result of the fair value change in interest rate swaps. Additionally, interest expense on long-term debt decreased $1.3 million as a result of lower variable base interest rates on the Company’s Credit Facilities, $0.8 million of income related to support services provided under the TSA with Ignite Visibility, partially offset by a $1.9 million year over year decrease in unrealized foreign currency gain and a $0.9 million decrease in interest income. The decline in interest expense on long-term debt in both the three and six-month periods is a result of lower variable base interest rates on the Company’s Credit Facilities (as defined below) and the amendment to the Term Loan (as defined below) in the third quarter 2025 resulting in a reduction in margin and the removal of the credit spread adjustment (see Note 10. Long-Term Debt in this Quarterly report on Form 10-Q).

Income tax expense increased by $0.1$0.2 millionmillion, or 18.4%, and $0.3 million, or 19.9%, for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the corresponding periodperiods in 2025, with the change driven primarily by an increase in net income from continuing operations before tax and discrete items, including a Canada return to provision adjustment during the three and six months ended June 30, 2025 and a New Zealand return to provision true-upadjustment during the threesix months ended MarchJune 31,30, 2025.

As of MarchJune 31,30, 2026, we had cash, cash equivalents and restricted cash of $129.3$133.5 million, $155.0 million of available borrowing capacity under our Revolver (as defined below) and $525.3$523.9 million outstanding under our Term Loan. We believe that our existing cash, cash equivalents and restricted cash, availability under our Credit Facilities, and our cash flows from operations will be sufficient to fund our working capital requirements and planned capital expenditures, and to service our debt obligations for at least the next twelve months. However, our future working capital requirements will depend on many factors, including our rate of revenue growth, the timing and size of future acquisitions, and the timing of introductions of new products and services. If needed, additional funds may not be available on terms favorable to us, or at all. If we are unable to raise additional funds when desired, our business, financial condition and results of operations could be adversely affected. See Part II, Item 1A. “Risk Factors.”

Net cash provided by operating activities was $24.6$53.1 million for the threesix months ended MarchJune 31,30, 2026, compared to $30.7$57.7 million for the threesix months ended MarchJune 31,30, 2025. Changes in net cash provided by operating activities resulted primarily from cash received from net sales within our subscription and transaction fees. Other drivers of the changes in net cash provided by operating activities include payments for personnel expenses for our employees, costs related to delivering our services and products, partner commissions, advertising and interest on our long-term debt.

The decrease in cash provided by operating activities for the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025 was primarily due to investments made to support the growth of our business of $24.5 million, including personnelhigher employee and related expenses ofand $11.4 millionsoftware and higher costs directly related to the delivery of our services and products of $1.7 million,tools; partially offset by an increase in cash collections from our subscription and transaction fees of approximately $4.2$12.9 million, lower cash outflows directly related to the delivery of our services and products of $3.7 million, income of $2.9$3.1 million related to support services provided under the TSA, and lower taxes paid of $2.3$1.0 million. Additionally, cash provided by operating activities decreased $2.3$0.7 million related to the marketing technology solutions business, which was sold on October 31, 2025 (see Note 3. Acquisition and Disposition in this Quarterly report on Form 10-Q).

During the threesix months ended MarchJune 31,30, 2025,2026, net cash used in investing activities of $5.6$17.1 million was related primarily to costs to develop software of $5.1$15.6 million and $0.5$1.5 million for purchases of property and equipment.

During the threesix months ended MarchJune 31,30, 2026, net cash used in financing activities of $16.4$31.1 million was related primarily to the repurchase and retirement of shares of our common stock of $13.8$28.6 million.

During the threesix months ended MarchJune 31,30, 2025, net cash used in financing activities of $12.3$29.6 million was related primarily to the repurchase and retirement of shares of our common stock of $11.1$31.6 million.

Effective as of June 10, 2025, the Company entered into an additional amendment to the Credit Facilities (the “June 2025 Amendment”) to reduce the commitments outstanding under the Revolver, extend the maturity of a portion of such commitments and reduce the applicable margin with respect to extended revolving loans. As a result of the June 2025 Amendment, commitments under the Revolver were reduced from $190.0 million to $155.0 million. With respect to $125.0 million of such commitments, (i) the maturity date was extended to January 6, 2028 and (ii) the applicable margin for (x) Term SOFR (as defined in the Credit Facilities) loans was reduced to 2.50% and (y) ABR (as defined in the Credit Facilities) loans was reduced to 1.50%, in each case, subject to a single 0.25% step-down based on the Company’s first lien net leverage ratio. With respect to theThe remaining $30.0 million of such commitments,commitments (i)expired the maturity date remainson July 6, 2026 and (ii) the applicable margin was unchanged.2026.

Pursuant to the July 2025 Amendment, with respect to $125.0 million of commitments under the existing $155.0 million Revolver, (i) the maturity date was extended to July 29, 2030 and (ii) the applicable margin for (x) Term SOFR loans was reduced to 2.00% and (y) Alternate Base Rate loans was reduced to 1.00%, in each case, subject to a 25 basis points step-up based on the Company’s first lien net leverage ratio. Other than the changes noted above, the terms and conditions of all commitments at closing as well as those extending beyond the original maturity date remain the same as the existing Revolver. Accordingly, $155.0$125.0 million of availability remains under the Revolver until July 6, 2026 and then reduces to $125.0 million through July 29, 2030.

As of MarchJune 31,30, 2026, there was $525.3$523.9 million outstanding under our Credit Facilities, all of which was related to the Term Loan as no amounts were outstanding under the Revolver. The effective interest rate on the Term Loan was approximately 6.08%6.02% for the three months ended MarchJune 31,30, 2026, excluding the effect of any interest rate swap agreements.

As of MarchJune 31,30, 2026, we were in compliance with the financial covenants under the Credit Facilities.

The Company repurchased and retired 1.31.4 million and 2.7 million shares of common stock for approximately $13.9$14.8 million and $28.7 million, including transaction fees and taxes, during the three and six months ended MarchJune 31,30, 2026. As of MarchJune 31,30, 2026, $33.9$19.2 million remained available under the Repurchase Program.

There have been no material changes to our contractual obligations as of MarchJune 31,30, 2026 from those disclosed in our Annual Report on Form 10-K.

Our critical accounting policies are described in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in our Annual Report on Form 10-K. During the threesix months ended MarchJune 31,30, 2026, there were no material changes to our critical accounting policies from those discussed in our Annual Report on Form 10-K.